Wall Street gets some help from alleviating virus fears

Traders work on the NYSE floor in New York
Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., November 29, 2021. REUTERS / Brendan McDermid

December 6, 2021

By Devik Jain, Shreyashi Sanyal and Alden Bentley

(Reuters) – Wall Street’s key averages closed higher on Monday with sensitive economic sectors and travel-related shares solid gains as investors were encouraged by some Upbeat comment from a top US official on the latest COVID-19 variant.

Of the three main Wall Street averages, the Dow gained the most while industry and consumer, up about 1.6 percent, were the S&P’s strongest sectors, followed by energy and utilities. 1.5%. But a slump in COVID-19 vaccine companies has dented profits in the healthcare sector.

While the COVID-19 Omicron variant has caused alarm and some new restrictions around the world, investors appear to have been reassured by Dr. Anthony Fauci, the top US infectious disease official , who told CNN that “so far, there doesn’t seem to be any seriousness about it. However, he said more research is needed.

“People are less nervous about this variation,” said King Lip, chief investment strategist at Baker Avenue Asset Management in San Francisco.

Lip also cited a boost from news that China’s central bank would cut the amount of cash banks must hold in reserve, potentially spurring foreign companies to sell products in China as well as the economy. Chinese economy.

The Dow Jones Industrial Average rose 646.95 points, or 1.87%, to 35,227.03, the S&P 500 gained 53.24 points, or 1.17%, to 4,591.67 and the Nasdaq Composite added 139.68 points, or 0.93% to 15,225.15.

The S&P 500 Value Index rose 1.5%, outperforming its growth index, which gained 0.9%.

The economically sensitive Dow Jones Transportation Index outperformed the broader market with a 2.3% gain while the Russell 2000 small-cap index gained 2%.

Wall Street’s major indexes have fluctuated wildly since Nov. 26 as investors grazed on news of the COVID-19 variant Omicron and then hawkish comments by the Federal Reserve Chair. State Jerome Powell last week on a faster reduction in government bond purchases to tackle rising inflation.

Monday’s S&P results were 2.3% below trading levels before investors began reacting to the Omicron virus.

“If today’s strength in the blues is self-sustaining, that could give the rest of the market a sense of possibility,” said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. ability to begin to feel confident.”

However, Goldman Sachs on Saturday cut its US economic growth outlook to 3.8% for 2022, citing risk and uncertainty surrounding the arrival of Omicron. Investors were also bracing for a potential impact on corporate earnings, especially among retailers, restaurants and travel agencies.

The three industries that posted the biggest percentage gainers were airlines led by United Airlines, up 8.3% while the S&P Airline index closed up 5.5%.

Other strong gainers in travel-related stocks included Norwegian Cruise Line Holdings, which rose 9.5%. Vacation home rental company Airbnb added 8.5%.

COVID-19 vaccine makers Moderna Inc fell 13.5% and Pfizer fell 5% as investors predicted the development of a vaccine with specific protections for Omicron could take several years. month.

Nvidia closed down 2%. Investors have been worried about the outcome of regulatory scrutiny over its purchase of chip company ARM Ltd. his.

Shares of Kohl’s Corp closed up 5.4% after hedge fund Engine Capital LP said it was pushing the department store chain to consider selling the company or splitting up its e-commerce division to improve its share price. are lagging behind.

JJ Kinahan, chief market strategist at TD Ameritrade, said investors are likely bracing for the December 17 expiration of options and futures contracts.

“You have a lot of dual duty companies right now. You’re trying to eliminate the risk, associated with expiration, while also rebalancing your portfolio towards 2022,” he said.

Advances outnumbered discount issues on the NYSE by a ratio of 2.82 to 1; on Nasdaq, 1.71 to 1 is in favor of the bulls.

The S&P 500 posted 20 52-week highs and a new low; Nasdaq Composite recorded 28 new highs and 600 new lows.

On US exchanges, 11.96 billion shares changed hands compared with an average of 11.55 billion over the last 20 sessions.

(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Alden Bentley and Sinéad Carew in New York, Editing by Maju Samuel, Shounak Dasgupta and Cynthia Osterman) Wall Street gets some help from alleviating virus fears

Bobby Allyn

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